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There are two main types of student loans: federal student loans — issued by the U.S. Department of Education — and private student loans. Both differ in interest rates, eligibility requirements, loan modification options and forgiveness programs.
Although federal loans offer more flexible repayment terms and borrower protections, a private student loan can help cover your school’s total cost of attendance after you’ve hit the federal borrowing limit and exhausted all other options. We researched available loan options and identified the eight best private student loans for 2024. (See our methodology here.)
Our Top Picks For Best Student Loans
Note: Experts recommend taking out federal student loans before taking on private student loan debt. Jump straight to that section. See how we chose our winners.
Best Private Student Loans:
Best Private Student Loans Reviews
- Loan terms as long as 15 years
- Nine-month grace periods for graduate students
- Borrow up to total cost of attendance
- International students must have a valid Social Security number and cosigner that is a U.S. citizen or permanent resident to qualify for a loan
- Cosigner release only available after half the repayment term is completed
- International students aren't eligible for cosigner release
HIGHLIGHTS
- Loan types
- Career, undergraduate, graduate and parent
- Loan amounts
- $1,000 to total cost of attendance
- Loan terms
- 5 to 15 years
- Minimum credit score
- Not disclosed
- Minimum credit score
- Not disclosed
WHY WE CHOSE IT
College Ave Student Loans ranks as best overall due to its variety of loan options, in-school payment plans and lengthy grace periods for graduate students. It offers private loans for traditional students, as well as international students and parents. Borrowers can choose from multiple repayment terms and payment plans.
COLLEGE AVE PRIVATE STUDENT LOAN RATES
Undergrad rates — Variable
5.59% - 17.99% with autopay discount
Undergrad rates — Fixed
3.89% - 17.99% with autopay discount
Graduate rates — Variable
5.59% - 14.49% with autopay discount
3.89% - 14.49% with autopay discount
Read full College Ave student loan review>>
See rates on College Ave's Secure Website>>
- Grace period of 36 months for medical school students
- Offers medical residency and relocation loans
- Cosigner releases available after just 12 monthly payments
- No information available about credit score requirements
- No loan prequalification option
- Discontinued parent student program
HIGHLIGHTS
- Loan types
- Career, undergraduate, graduate
- Loan amounts
- $1,000 to 100% of school-certified cost of attendance
- Loan terms
- 10 to 15 years
- Minimum credit score
- Not disclosed
- Minimum income
- Not disclosed
WHY WE CHOSE IT
Like other lenders, Sallie Mae has education loan options for undergraduate, graduate, professional and medical school programs. It's also one of the few lenders that has options for students enrolled in trade or certificate programs.
Sallie Mae is our choice for medical school students because its loans can cover up to 100% of the total cost of attendance. Sallie Mae’s medical school loans feature a 36-month grace period, and borrowers can defer payments for up to 48 months during their residency and fellowship.
SALLIE MAE PRIVATE STUDENT LOAN RATES
Undergrad rates — Variable
5.37% - 15.70% with autopay discount
Undergrad rates — Fixed
3.99% - 15.49% with autopay discount
Graduate rates — Variable
5.37% to 14.97% with autopay discount
3.99%–14.48% with autopay discount
Medical school rates — Variable
5.37% to 14.96% with autopay discount
Medical school rates — Fixed
3.99%-14.46% with autopay discount
Read full Sallie Mae student loan review>>
See rates on Sallie Mae's Secure Website>>
- No loan maximum
- Four repayment options for parent borrowers
- Lengthy grace period
- $100 rate match guarantee
- For parent loans, first-, second- and third-year students must be enrolled full-time
- Student must pursue a bachelor's or graduate degree
- Loans not available to residents of Nevada
HIGHLIGHTS
- Loan types
- Undergraduate, graduate, parent
- Loan amounts
- $1,000 to 100% of the school-certified cost of attendance
- Loan terms
- 5 to 15 years
- Minimum credit score
- 650
- Minimum income
- $35,000
WHY WE CHOSE IT
While other lenders have limited repayment options for parents, Earnest has four repayment plans to choose from, and parents can take advantage of a longer-than-usual grace period. Plus, Earnest offers loans that cover up to 100% of the school-certified cost of attendance, and it boasts a rate match guarantee.
EARNEST PRIVATE STUDENT LOAN RATES
Undergrad rates — Variable
5.62%-18.26% with autopay discount
Undergrad rates — Fixed
3.99%-16.74% with autopay discount
Graduate rates — Variable
5.62%-18.26% with autopay discount
3.99%-16.74% with autopay discount
Parent loan rates — Variable
5.62%-18.26% with autopay discount
Parent loan rates — Fixed
3.99%-16.74% with autopay discount
Read full Earnest student Loans review>>
See rates on Earnest's Secure Website>>
- No late or insufficient fund fees
- Autopay discount and multiple loan discounts
- Cosigner releases offered after 24 months
- Extra member benefits
- Only students attending four-year schools are eligible for loans
- High credit score required for lowest rates
HIGHLIGHTS
- Loan types
- Undergraduate, graduate, parent
- Loan amounts
- $1,000 to 100% of school-certified cost of attendance
- Loan terms
- 5 to 15 years
- Minimum credit score
- Not disclosed
- Minimum income
- Not disclosed
WHY WE CHOSE IT
For those looking for a private student loan without added fees, SoFi is the top lender. It offers significant rate discounts and membership benefits, and SoFi doesn't charge origination or late fees.
PRIVATE STUDENT LOAN RATES
Undergrad rates — Variable
5.74%–15.86% with autopay discount
Undergrad rates — Fixed
4.19%-14.83% with autopay discount
Graduate rates — Variable
5.74%-15.86% with autopay discount
4.19%–14.83% with autopay discount
Read full SoFi student loans review>>
See rates on SoFi's Secure Website>>
- Loans without cosigners or credit histories available
- Options for students attending certificate programs and bootcamps
- 1% Cash Back Graduation Reward
- First- and second-year students not eligible for non-cosigned loans
- International students must have a cosigner that is a U.S. citizen or permanent resident
- Low loan maximums
HIGHLIGHTS
- Loan types
- Bootcamps, undergraduate, graduate, parent
- Loan amounts
- $2,001 to $200,000 (lifetime maximum) *In Massachusetts, the minimum is $6,001
- Loan terms
- 5 to 15 years
- Minimum credit score
- Not disclosed
- Minimum income
- $24,000
WHY WE CHOSE IT
Ascent is the best option for borrowers without a cosigner due to its specialized non-cosigned loan options for undergraduate, graduate and DACA students.
ASCENT PRIVATE STUDENT LOAN RATES
Undergrad — Cosigned — Variable
5.99%-15.85% (lowest rates include autopay discount)
Undergrad — Cosigned — Fixed
3.79%-15.41% (lowest rates include autopay discount)
Undergrad — Noncosigned credit-based — Variable
9.08%-14.95% (lowest rates include autopay discount)
Undergrad — Noncosigned credit-based — Fixed
8.65%-14.51% (lowest rates include autopay discount)
Undergrad — Noncosigned outcomes-based — Variable
13.46%-15.40% (lowest rates include autopay discount)
Undergrad — Noncosigned outcomes-based — Fixed
13.09%-15.08% (lowest rates include autopay discount)
7.74%-15.85% (lowest rates include autopay discount)
4.79%-15.41% (lowest rates include autopay discount)
Read full Ascent student loans review>>
See rates on Ascent's Secure Website>>
- Partners with credit unions and community banks
- Services loans and offers in-house customer service
- Some lending partners offer a cosigner release after 12 on-time payments
- International students aren't eligible for loans
- Only one (10-year) repayment option
- Policies vary by partner lender
HIGHLIGHTS
- Loan types
- Undergraduate, graduate
- Loan amounts
- $2,000 to $120,000 (lifetime maximum for undergraduate students)
- Loan terms
- 10 years
- Minimum credit score
- Not disclosed
- Minimum income
- $24,000
WHY WE CHOSE IT
We chose LendKey as the best marketplace because it partners with a large network of loan providers. Unlike other marketplaces, LendKey services the loans borrowers take through its marketplace and offers in-house customer service.
LENDKEY PRIVATE STUDENT LOAN INTEREST RATES
Undergrad rates — Variable
6.00% - 13.75% (lowest rates include autopay discount)
Undergrad rates — Fixed
3.99% - 13.75% (lowest rates include autopay discount)
Read full LendKey student loans review>>
See rates on LendKey's Secure Website>>
- Compare multiple offers with a soft credit check
- Loan terms as long as 20 years
- High loan maximum
- Doesn't include all major lenders
- APR rates, loan terms and repayment options depend on the lender
- Not all Credible partners offer cosigner release
HIGHLIGHTS
- Loan types
- Undergraduate, graduate, parent
- Loan amounts
- $1,000 to 100% of school-certified cost of attendance
- Loan terms
- 5 to 15 years
- Minimum credit score
- Varies by lender
- Minimum income
- Varies by lender
WHY WE CHOSE IT
Credible allows borrowers and cosigners to compare multiple lenders with only one application and a soft credit check that won’t impact their credit scores.
CREDIBLE PRIVATE STUDENT LOAN RATES
Undergrad rates — Variable
5.13%-17.99% with autopay discount
Undergrad rates — Fixed
3.74%-17.99% with autopay discount
Graduate rates — Variable
5.13%-17.99% with autopay discount
3.74%-17.99% with autopay discount
Medical school rates — Variable
5.13%-17.99% with autopay discount
Medical school rates — Fixed
3.74%-17.99% with autopay discount
Read full Credible student loans review>>
See rates on Credible's Secure Website>>
- Loans available to international students without a cosigner
- Interest-only payments while in school
- Six-month grace period
- Higher-than-average rates and fees
- Only one repayment option
- Must attend a partner school
- Not available to first- or second-year undergraduate students
HIGHLIGHTS
- Loan types
- Undergraduate, graduate
- Loan amounts
- $2,001 to $100,000
- Loan terms
- 10 years
- Minimum credit score
- Not required
- Minimum income
- Not disclosed
WHY WE CHOSE IT
Although some private student loan lenders will issue loans to international students, they typically require the student to have a cosigner that is a U.S. citizen or permanent resident. If the student doesn't have close friends or family in the country, it can be difficult to find loans for school.
MPower is one of the only lenders that offers private student loans to international students without a cosigner or collateral.
MPOWER PRIVATE STUDENT LOAN RATES
13.72% APR (with a 0.25% autopay discount)
13.72% APR (with a 0.25% autopay discount)
See rates on MPower's Secure Website>>
Federal Student Loans
Federal student loans are backed by the U.S. Department of Education and offer exclusive benefits and repayment options that are not available with private student loans. Experts recommend you always exhaust federal student loans before turning to private lenders.
Today, all of these loans are issued under the federal Direct Loan program. Unlike private loans, most federal loans don't require credit checks, so you can qualify even if you have bad credit.
There are three main types of federal student loans available to students and parents of students:
- Direct Subsidized Loan: For undergraduate students with financial need. The Education Department pays the interest while the student is in school at least half-time, during the grace period after leaving school, and during deferment.
- Direct Unsubsidized Loan: For undergraduate, graduate and professional students regardless of financial need. Students are responsible for paying interest at all periods.
- Direct PLUS Loans: For graduate and professional students and parents of undergraduate students. Unlike other federal loans, PLUS loans require basic credit checks. Borrowers with adverse credit histories may need to meet additional requirements, such as adding an endorser to their applications and completing PLUS loan credit counseling.
Student Loans Guide
In this guide, we outline what students and their families need to know to easily navigate the student loan application process.
How do student loans work?
Student loans are issued by the federal government or private lenders to help students pay for undergraduate or graduate studies. The loan goes toward tuition, books, student housing and other education-related expenses.
Once a student loan application is approved, the funds are sent directly to the school to cover tuition, fees and on-campus student housing. The remaining balance is disbursed to the student.
Private loans accrue interest from the start of the loan, while some federal loans have more flexible terms. Repayment options include deferment, interest-only, or full payment.
Federal vs. private student loans
Since private loans don’t offer the same protections that federal loans do, the general advice is to seek private student loans after you’ve exhausted every federal option.
Not required for most loans
Borrowing limits apply to most loans
Typically no annual limit
Payments while in schools
Payments deferred until student leaves school
Eligible for loan forgiveness
Federal student loans
Federal student loans are the first choice for many due to their low rates, flexible repayment options and federal protections.
To apply for federal loans and additional financial aid, students must submit the Free Application for Federal Student Aid (FAFSA) once every school year. Your school will calculate how much you’re eligible to borrow based on the cost of attendance and your family’s financial information.
The federal government limits how much a student can borrow annually and over their lifetime based on the academic year, loan type and the borrowers’ dependency status.
- Income-driven loan repayment plan options
- Opportunities for student loan forgiveness
- Low interest rates
- Eligible for forbearance if experiencing a financial hardship
- No credit checks for most loans
- Disbursement fees apply
- Federal loans aren't subject to statutes of limitations
- Only available to U.S. citizens and permanent residents with Social Security numbers
- Strict annual and aggregate limits
Private student loans
Private student loans are similar to personal loans, as they are issued by private banks or credit unions.
Private student loan lenders look at students' credit scores and credit reports to determine interest rates and loan approval. Since most students don't have enough credit history, lenders often require a qualifying cosigner.
Private loans don’t feature the same benefits as federal student loans, but they can help pay your school’s total cost of attendance if you’re no longer eligible for federal aid.
Most private lenders suggest borrowers start loan repayment while still in school, but most offer in-school deferment or grace periods, although interest will continue to accrue.
- Available to U.S. citizens and qualifying international students
- No financial need requirements
- Fixed and variable rates
- Higher loan limits for undergraduate loans
- Not eligible for federal forgiveness programs
- Limited repayment options and hardship assistance programs
- Requires credit check
- May have higher APRs
- Will likely require a cosigner
Student loan interest rates
Current private student loan interest rates range from 4.07% to 16.85%. The interest rate on your loans depends on the type of loans you have, your education level and the lender issuing the loan.
Rates can be fixed or variable. Fixed interest rates stay the same for the entire repayment period. By contrast, variable interest rates can change over time, so they are usually best for borrowers who want a shorter repayment term.
Average student loan interest rate
Federal student loans
Interest rates on federal student loans are established by federal law. The rates are fixed, so they stay the same for the duration of your loan term.
For federal student loans, we calculated the average interest rate using the rates for the upcoming academic year. The overall average interest rate for federal student loans is 7.86%.
The rates you’ll pay depend on the loan and borrower type. These are the rates for loans issued for the 2024-2025 academic year
- Undergraduate: 6.53%
- Graduate: 8.08% for Direct Unsubsidized | 9.08% for Grad PLUS
- Parent: 9.08%
Private student loans
Private student loans work differently. Lenders set their rate range based on an index, such as the Secured Overnight Financing Rate (SOFR). The rates can change over time as the market fluctuates, so you may find that current rates are higher or lower than when you took out your loan.
Other factors affect your private loan rates, including your credit history, income, debt-to-income ratio and whether you have a cosigner.
For private student loans, we looked at available interest rates from 14 leading lenders. We calculated that the overall average interest rate for private student loans was 10.67%.
How to calculate student loan interest
To calculate your interest:
- Divide your annual percentage rate (APR) by 365 to get your daily interest rate
- Multiply the daily interest rate by the remaining loan principal to find your daily interest accrual
- Multiply the daily interest accrual by the number of days in your loan billing cycle
For example, let’s say you have $20,000 at 6.00% APR:
- Divide 6.00% (APR) by 365 (number of days in a year)=0.0001643 (Your daily interest rate)
- Multiply 0.0001643 (daily interest rate) by $20,000=3.286 (daily interest accrual)
- Multiply 3.286 (daily interest accrual) by 30 (days in billing cycle)=$98.58
The resulting $98.58 is how much you’ll pay in interest during the first month of repayment.
You can use the Federal Student Aid Simulator to calculate your interest and overall repayment.
How to apply for student loans
The following are general tips to consider before applying for student loans, whether federal or private.
1. Calculate your financial needs
Consider your school’s cost of attendance (tuition, materials, room and board, etc.) and then factor in additional living expenses. Money’s Best Colleges in America contains information about admission, costs, financial aid and graduation rates of hundreds of public and private institutions around the United States.
2. Look into federal loans
We recommend you consider federal loans first, as they have several advantages over private loans and a variety of options to choose from.
If you need to take out a private student loan, keep in mind that each lender offers different terms, rates and benefits. Shop around and compare fees and APRs from multiple lenders before making a decision.
Tip: Most federal student loans are available without a credit check, so they're a good option for those with poor credit or no credit history.
3. Seek expert help
Read expert advice from sources like the Consumer Financial Protection Bureau and College Board before you apply for private student loans. Other options may be available to you, such as grants and scholarships.
4. Choose the right lender for you
To choose the best student loan, you should have a clear understanding of what each lender requires and what they offer regarding interest rates and repayment options:
- Check your lender’s credentials: Only do business with reputable lenders. To determine this, use reputable sources like Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).
- Apply for prequalification: By prequalifying, you get to see what rates, terms and benefits each lender offers, while avoiding a hard credit inquiry. Be sure to understand how different interest rates and terms affect your payments.
- Look for lenders with in-school repayment options: Starting loan repayment early will reduce the debt burden. Opt for private lenders with multiple options, a grace period, and no penalties for early loan repayment.
- Opt for lenders with low or no fees: Application and origination fees are processing costs added to your principal, which means you’ll pay interest on them. All federal loans have origination fees; private loans typically do not. Note that student loan companies are legally prohibited from charging prepayment penalties. If you can, look for lenders that don’t charge late fees either.
- Take advantage of discounts and perks: Many lenders offer autopay discounts and other perks such as free study or tutoring programs and bonuses for good grades or referring friends.
How to pay off your student loans
Paying off student loans isn't easy. Americans owe a total of $1.7 trillion in student debt, a burden that can delay home ownership, starting a family and even retiring.
With this in mind, we have outlined some of the best practices to help you stay on top of your debt and pay off your student loans quickly:
1. Research federal repayment plans
For federal student loans, the government offers multiple repayment plans that can be grouped as follows:
| Repayment plan | Monthly payment | Repayment period | How it works | Eligible loans |
| Standard repayment plan | Fixed monthly payments of at least $50 | Up to 10 years (between 10 and 30 for consolidation loans) | Payments are spread out in equal installments over the loan term | • Direct Subsidized/Unsubsidized • Direct PLUS • Direct Consolidation • Subsidized/Unsubsidized Stafford • FFEL PLUS/FFEL Consolidation |
| Income- Based Repayment | 10% of your discretionary income if you are a new borrower as of July 1, 2014 | 20 years | Payments recalculated annually based on your discretionary income | Direct Subsidized Direct Unsubsidized Grad PLUS |
| Income- Contingent Repayment | Lesser of 20% of your discretionary income or payments under a 12-year plan | 25 years | Payments recalculated annually based on your discretionary income | Direct Unsubsidized Grad PLUS Parent PLUS loans if they’re consolidated with a Direct Consolidation Loan |
| Pay As You Earn | 10% of your discretionary income, but never more than you’d pay under a Standard Repayment Plan | 20 years | Payments recalculated annually based on your discretionary income | Direct Subsidized Direct Unsubsidized Grad PLUS |
| Saving on a Valuable Education | 5% to 10% of your discretionary income | 10 to 20 years for undergraduate loans 10 to 25 years for graduate loans | Payments recalculated based on your discretionary income | Direct Subsidized Direct Unsubsidized Grad PLUS Direct Consolidation Loans (not including any parent loans) |
| Graduated repayment plan | Payments increase every two years | Up to 10 years (between 10 and 30 for consolidation loans) | Monthly payments gradually increase over time | Same as standard repayment |
| Extended repayment plan | A fixed or graduated amount | Up to 25 years | Allows you to make a lower payment for a longer period | Same as standard repayment |
| Income -sensitive repayment | Based on annual income | 10 years | Fluctuate based on income | FFEL Loans |
2. Start repayment while you’re still in school
Private student loans begin accruing interest while you’re still in school. To keep accrued interest down, begin repayment as early as possible. You can save thousands of dollars over the life of the loan by keeping up with interest payments while you finish your degree.
3. Take advantage of loan forgiveness programs
Federal loans can be forgiven through Public Service Loan Forgiveness, a program that helps borrowers who work in traditionally lower-paying positions at government agencies, schools and non-profit organizations. Borrowers working in an eligible job can have their debts forgiven after 10 years of payments.
If you don’t work in public service but you also don’t earn enough to pay off your loans, you may be able to benefit from an income-driven repayment plan. These plans tie your monthly payments to how much you earn, and after a certain number of years, any outstanding debt is forgiven.
With existing income-driven repayment plans, borrowers can qualify for loan forgiveness after 20 or 25 years. But President Biden's new SAVE repayment plan would allow some borrowers to qualify for forgiveness in as little as 10 years.
Finally, even if you don’t qualify for full loan forgiveness, be sure to check for other student forgiveness programs. Some states, for example, have programs aimed at recruiting health care workers or teachers to underserved areas.
4. Create a budget
Budgets help track your spending habits and organize your finances. You may identify areas where you can cut back on spending to be able to make more payments toward your student loan debt.
5. Look for a job with loan repayment as a benefit
You may be able to get hired at a company that helps employees pay off their loans, or you could encourage your current employer to add loan repayment to its benefits program. Approximately 25% of employers offer some kind of student loan assistance program, according to the Employee Benefit Research Institute.
6. Consider refinancing and debt consolidation
Student loan refinance can be a good option if you already have private loans, but it’s not always a smart move for those with federal loans. Learn more through our article on how to refinance your student loans and our list of best student loan refinance companies.
7. Pay more than the minimum toward your principal
Calculate the maximum you can afford to pay each month toward your principal loan amount. If you can pay more than what you owe each month, that’s the best way to pay off your loans quicker. When you pay extra, the additional money goes directly to reducing your principal debt.
8. Consider the debt snowball or debt avalanche methods
Two of the most popular strategies to minimize debt are the snowball and avalanche methods.
| Debt snowball | Debt avalanche |
| Pay more toward your smallest debt and make minimum payments toward the rest. This can keep you motivated by helping you get rid of smaller debts quickly. | Tackle debt with a higher interest rate first until completely paid off. This can help you save on interest payments and keep your debt from ballooning further. |
Best Student Loans FAQ
What is the interest rate on student loans?
The rate depends on the type of loans you have. For federal loans, the following fixed rates apply: Federal Direct Subsidized and Unsubsidized (for undergraduate students): 6.53%; Federal Direct Unsubsidized (for graduate students): 8.08% and PLUS Loans (for graduate students and parent borrowers): 9.08%. With private loans, the rates can be fixed or variable; the average rate is 10.67%.
Do you need a cosigner for student loans?
Most federal loans are available without a cosigner, even if you don't have good credit. For private student loans, students will usually need a cosigner — such as a parent or relative — with good credit, to qualify for a loan.
Can you get student loans with bad credit?
If you have bad credit, federal loans are an excellent starting point. Most loans are available without credit checks, and the federal government doesn't require a minimum credit score. With private loans, qualifying for a loan may be more challenging. If you have poor credit, you'll likely need a creditworthy co-signer to apply for a loan.
What is the best private student loan lender?
Based on our research, we selected College Ave as the best overall. Other lenders may be a better fit for your individual situation, but in general, College Ave offers competitive interest rates, several loan types and multiple repayment options. See all of our top lenders above.
How We Chose The Best Student Loans
To choose the best student loans of the year, we looked at both federal and private student loan options, outlining the benefits and drawbacks of each.
Our reviews, however, are focused on private student loan lenders. Private student loans don't offer the same benefits and protections you would have through federal student loans.
For this reason, we prioritized private lenders that offered the following:
Flexible repayment options
Federal student loans have several different standardized payment plan models, whereas private lenders often offer less flexibility. We looked for lenders that offered deferred payment options, forbearance plans and interest-only loans while still in school.
Low or no processing fees
Possible costs for private loans include late fees or insufficient fund fees. When we looked at the industry, we looked for lenders that waived these or offered reduced fees and had discounts available.
Competitive interest rates
We preferred lenders that offered rates that were in line with the industry average or better. For 2024, we looked for lenders with rates of 9.88% or better.
Students and parents should compare offers from multiple lenders to ensure they get the lowest rates. With this in mind, we also included student loan marketplaces that allow borrowers to compare loan offers from multiple lenders in one place.
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